Swiggy, India’s leading food and grocery delivery giant, is gearing up to go public on November 6. The IPO comes with a revised valuation of $11.3 billion, a decrease from its previously anticipated $15 billion valuation. This marks a significant moment for both the company and the broader Indian tech sector.
Grey Market Sentiment
In the grey market, Swiggy’s shares have been trading at a 5% premium, or approximately ₹19 above the IPO price band of ₹371 to ₹390. The grey market premium (GMP) reflects a moderate investor interest, suggesting tempered optimism as Swiggy heads into its IPO.
Fundraising and Key Backers
Swiggy aims to raise ₹11,327 crore through a combination of fresh equity and an offer-for-sale (OFS). Key investors participating in the OFS include:
Additionally, Swiggy has offered shares to its employees at a discount, a move that indicates the company’s awareness of mixed investor sentiment while aiming to foster internal confidence.
Institutional Interest and Strong Backing
On the institutional side, Swiggy’s IPO has seen substantial interest. Major institutional investors such as Norway’s sovereign wealth fund, Norges Bank and Fidelity have reportedly placed bids valued at over $15 billion—significantly exceeding the ₹605 million allocation reserved for institutional investors. This robust institutional interest points to a strong belief in Swiggy’s long-term potential, despite the IPO’s lower valuation.
Financial Challenges
Swiggy’s path to profitability has been challenging. For FY24, the company reported a consolidated loss of ₹2,350 crore on a revenue of ₹11,634 crore. While Swiggy has expanded beyond food delivery into grocery services, high operational costs and stiff competition continue to impact its financials.
Looking Forward
Despite these financial hurdles, Swiggy’s move to go public reflects a strategic bet on future growth and long-term value creation. With solid institutional support and a diversified service offering, Swiggy is positioning itself as a significant player in India’s rapidly evolving e-commerce and quick commerce sectors.
Source: Techiexpert